THE year-on-year pace of growth in UK retail sales volumes slowed in early January, but was better than expected as the grocery sector performed strongly, a survey signals.

Of the retailers surveyed by the Confederation of British Industry between January 2 and 16, 41% said sales volumes were higher than a year earlier; 24% reported they were lower; and 35% declared they were unchanged.

The resultant net 17% reporting a year-on-year rise in volumes was down from a corresponding balance of 19% in the CBI's December distributive trades survey, thus signalling a slowdown in the annual pace of increase.

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However, in the December survey, only a net 10% of retailers had projected a year-on-year rise in sales in January. The latest survey shows strong sales growth for the grocery sector, and furniture and carpet retailers. Clothing stores turned in a solid performance but household goods sales fell sharply.

Judith McKenna, chairman of the CBI distributive trades panel, said: "Despite mixed news from the high street over the past few weeks, strong sales growth in the grocery sector has added a touch of sparkle to overall retail sales.

"However, we are far from out of the woods. With tough trading conditions and subdued consumer spending adding to the uncertain economic picture, retailers will continue to face tough market conditions in the coming months."